'Tiny' NZ best country for business

JAZIAL CROSSLEY

Last updated 06:48 16/11/2012

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Forbes magazine has rated New Zealand the best country on the planet to do business in.

It ranked "tiny" New Zealand at the top of its list, bumping it up from the second place last year. The South Pacific nation excelled because of what Forbes called a "stable" business climate, transparency and an environment that encouraged entrepreneurs.

New Zealand came first for a lack of corruption, a low level of red tape, a high level of personal freedom and strong investor protection.

Employers and Manufacturers Association chief executive Kim Campbell said the ranking was great public relations for New Zealand.

"You can form a company here more quickly and cheaply than anywhere else, we have a very transparent judicial system, safety for contractors is good, we have a very bright and engaged labour force and a very good university and tertiary system," Campbell said.

"But we are a very small market and it is a hard place to make money in.

"We have very opaque foreign investment requirements, so it really isn't very transparent for foreign investors, plus our Resource Management Act, which was world-leading when introduced, has become a nightmare for everyone."

Forbes determined the best place to do business by analysing 141 countries on factors that include taxes, property rights, stock market performance, technology and innovation.

The US financial magazine praised New Zealand's close ties to Australia, saying both countries held up "better than most" during the recent global downturn despite the high New Zealand dollar and employment recently reaching its highest level since 1999.

It said the corporate tax cut last year, which reduced rates from 30 per cent to 28 per cent, "eliminated certain deductions, making the cut fiscally neutral".

Investors here, according to Forbes, have "prospered" based on the NZX 50 index rising almost a quarter in the past year.

Denmark was ranked second for its trade freedom and technology, and Hong Kong third for its "vibrant" economy. It ranked the United States at No 12.